Friday 27 April 2012

Reining in the losses

Up until this point in my trading career, I've tended to take the "win-more-than-I-lose-and-I'll-be-happy" approach.

So if I ended a day with £200, after making £350 of positive trades and £150 of negative ones, I'd write the losses off using that old adage: you've got to speculate to accumulate.
    But last week I started to write down my pre-race and in-running trades and was horrified at the state of affairs! Some days, my pre-race game was being bolstered by my in-running game; other days, it could be the other way round.

    What I did notice was that these two disciplines rarely "fired" together: if I made a bit of money pre-race I'd often gamble it away in-running hoping to make more, and if I made a loss pre-race then the in-running trades were merely damage limitation.

    Writing down all my trades is starting to pay off now though. It's putting things into perspective and making me more mindful of my trades. As a result, I'm starting to choose my battles more carefully. Today was very nice and stress-free for me

    and I only made about 20 quid's worth of duff trades overall. With the weather knocking out a couple of cards and totally screwing up Punchestown's schedule, it was pleasing to make nearly a ton on so few markets. That's almost unheard of for me, as usually I need about 20-30 races to get into some sort of rhythm. This week, been just as happy to bide my time and strike when things felt right, rather than trading everything that moves and coming unstuck.

    The other nice thing about writing trades down is you can set yourself little win-streak challenges. I managed about a 10-race win streak yesterday and it really focussed my efforts on not giving away my profits. I know Sam over at the excellent Adapt and Survive blog (wish you'd post more dude!) wrote about this a while back (I think he was putting together 70-80 race win-streaks!!) and it really is a great way of improving the ol' strike rate.


    1. Might be a good way to improve the strike rate but in my experience that doesn't necessarily improve the pnl. If anything I've usually found setting yourself any type of short term target is usually counter productive.

      But as I have free time I just checked over my last 3 mnths pnl and came up with the following stats, my longest win streak was 25, longest losing streak 5 and an overall win rate of 80.8%

    2. I'd like to be up around the 80% mark too. When I last checked it was more like 65%.

      I've had a decent week so the note taking seems to be working. Many of my losses are from carelessness; if I can reduce them (even just by a 1/3) then I can increase my balance and reduce my blood pressure! :)


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